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EDITORIAL: Waivers - beyond Roger Clarke

Published:Monday | June 4, 2012 | 12:00 AM

Despite Roger Clarke's gleeful attempt to parade it in the arena of sleaze, we hope that the COMPLANT waiver discussion can be rescued to serious debate on tax reform. For that, at its core, is what is at issue and what Mr Clarke missed in his document-waving charade in the House last week when he concentrated on taking cheap political shots.

COMPLANT is the Chinese firm that acquired the remaining three factories of Government's loss-making Sugar Company of Jamaica. Mr Clarke is the agriculture minister.

In the Budget Debate, Mr Clarke revealed that the former Jamaica Labour Party administration, among other incentives, granted COMPLANT relief for 20 years on corporate income tax and general consumption tax.

The minister wondered whether Jamaica would be able to muster anything from the COMPLANT venture other than "some employment". He raised the obligatory, and contrived, groans of dismay from many of his People's National Party colleagues. We doubt that either Omar Davies, the transport and works minister, or Peter Phillips, the finance minister, were among them. Prime Minister Portia Simpson Miller was likely to have been conflicted, embarrassed even, by Mr Clarke's jiggly little act.

Given Jamaica's fiscal crisis and its target this year of a primary surplus of six per cent of gross domestic product to satisfy the economic reform programme the Government hopes to negotiate with the International Monetary Fund, there is little capacity by the Simpson Miller administration to engage in stimulus spending and the domestic private sector is yet to regain its confidence from the internal and domestic recession. Foreign direct investment into Jamaica, after its sharp growth in the early 2000s, collapsed with the global financial crisis. The Chinese, for now, are the only game in town.

Dr Davies, with the support of the Government, has been aggressively pursuing China Harbour Engineering Company, under BOOT deals, to complete and extend the north-south segment of Highway 2000 as well as to expand the trans-shipment facilities at the Kingston Harbour. The Government's approach to this is the basis of Dr Davies' quarrel with the Office of the Contractor General.

Transparency on waivers

It was, in part, the same circumstances that - as Karl Samuda, the former industry minister, conceded - would have compelled the previous administration to cut the deal with COMPLANT to get off its hands sugar factories that consistently lost money and had accumulated debts of more than J$8 billion. Indeed, even as he jigged at the perceived embarrassment he caused the Opposition, Mr Clarke was touting the improved performance of the sugar industry, which was no doubt contributed to by COMPLANT.

In tramping about his petty stage, Roger Clarke failed to seriously contribute to, and advance, the discourse on tax policy and, more generally, on transparency in Government. This newspaper believes that all waivers and concessions granted by the Government, and the basis on which the decision was arrived at, should be public information. It should have happened in the case of the COMPLANT deal.

Then there is the larger issue of equity in policy and the conceptual matter of market distortions caused by waivers and incentives being grappled with by Finance Minister Phillips, against which he made a stab in the tax programme announced two Thursdays ago. Despite Roger Clarke, those issues are worthy of sober discourse.

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